MUSK: Hard Times Must Come For Utilities

In comments made
at a panel set up by the California Public Utilities
Commission, Musk said addressing climate change depends on
upending traditional power providers, and he called on regulators
to help lower the cost for renewable providers to compete with
them.

"There will be some amount of strife for existing utilities,
particularly ones heavy into fossil rules," Musk said. "There
will be bit of a hardship for them. But we have no choice. We
have to decide if we're going to have clean, sustainable energy
or not and if we decide want good future...and the only good
future is one with [clean] energy."

Musk argued for a carbon tax, expressing disbelief at the ongoing
presence of hydrocarbons for fuel use. "It's amazing that we burn
oil — it has much higher value in plastics," he said. "It's like
burning the furniture in your house instead of firewood."

SolarCity CEO Lyndon Rive warned of the danger that regulators
would allow the current monopolistic and fossil fuel-heavy power
company model to persist even as renewable energy grows.

"What don't we don't want to have happen is the innovation,
and then the
old business model still continues," he said. "We don't want two
energy infrastructures. At some point someone has to shut down,
and if you fast forward 10 or 20 years, I don't think we'll be
shutting down cleaner energy."

It is perhaps telling that the panel, called "Innovation
and the Impact of Regulation," did not feature a single
representative from one of California's utilities. The only other
member of the panel was Michael R. Peevey, the
commission's president who also serves as chairman of
the California Clean Energy Fund. The
commission regulates privately owned
electric and natural gas companies among other duties.

Musk
emphasized that regulators will have to prove flexible to work
around what amounts to monopoly control of power by most
utilities.

Peevey seemed
to be game, suggesting utilities would be devolve
into "wires companies" providing basic infrastructure if they
don't invest early enough in renewables. "The race goes to the
swift and to the clever," he said.